1999 (12) TMI 103 - AT - Income Tax

Summary

Issues Involved:
1. Whether the Commissioner is required by law to give an opportunity of hearing to the assessee while approving the order of Assessing Officer u/s 158BC.
2. Whether the approval of an order by the Commissioner without giving an opportunity of being heard to the assessee renders the order of Assessing Officer void ab initio or is curable in law.
3. Whether the provisions of section 158BG require the Commissioner to record his reasons in writing for approving the order of Assessing Officer u/s 158BC.
4. Whether the approval of Commissioner without recording his reasons in writing for approving the order renders the order of Assessing Officer void ab initio or is curable in law.

Summary of Judgment:

Issue 1(a): Opportunity of Hearing by Commissioner
The Tribunal held that the Commissioner is not required by law to give an opportunity of hearing to the assessee while approving the order of the Assessing Officer u/s 158BC. The approval process is considered an administrative act rather than a judicial one, and the principles of natural justice do not necessitate a second hearing for the assessee at this stage.

Issue 1(b): Validity of Order Without Hearing
The Tribunal concluded that the absence of an opportunity for the assessee to be heard by the Commissioner does not render the order of the Assessing Officer void ab initio. Any potential infirmity is curable by providing the assessee a chance to present arguments in the appeal proceedings against the assessment order u/s 158BC.

Issue 2(a): Recording Reasons in Writing
The Tribunal determined that the provisions of section 158BG do not require the Commissioner to record reasons in writing while approving the order of the Assessing Officer. The role of the Commissioner in this context is purely administrative, and the assessment order does not suffer from any infirmity due to the lack of recorded reasons.

Issue 2(b): Validity of Order Without Recorded Reasons
The Tribunal held that the approval of the Commissioner without recording reasons in writing does not render the order of the Assessing Officer void ab initio. Even if considered an infirmity, it is curable through the appeal process, where the assessee can challenge any part of the assessment order.

Conclusion:
The Special Bench answered all the questions in favor of the Revenue, stating that the procedural steps followed by the Commissioner in approving the assessment orders were valid and did not violate principles of natural justice. The appeals should be heard by regular Division Benches for any other grounds raised independently.